IS A HARD MONEY LOAN RIGHT FOR YOU? In the world of real estate investing, each property and every borrower is unique. Here are typical scenarios
HOW TO CHOOSE A REPUTABLE LENDER?
money lender, conduct your due diligence. It’s easy to get lured in by cheap rates; but do all of the math. The most important things to consider are a proven track record, good communication and access to capital. How long have they been lending? Do they have an uninterrupted record of funding loans through good times and bad? How many loans have they funded? Credible lenders have funded thousands of loans for investors.
CASH OUT: Do you have an investment property with established equity? With hard money, you can easily tap into that equity and use those funds towards acquisitions, renovations, and other business expenses. Whether it’s listed on the market, held as a rental, or mid-construction, hard money can help you recapitalize by pulling cash out.
FIX AND FLIP: Hard money lenders understand the
Do they have the experience to address
challenging scenarios, unique market or property
RENTAL: rental loans as debt-to-income ratios become too high, or the max limit of loans has been reached. Leveraging hard
What is their capital source? Are they lending their own money, using bank lines, or brokering? Protect yourself and make sure you identify this up front.
more properties and scale your business.
CREDIT OR INCOME ISSUES: If your credit situation is holding you back, a hard money loan could help. If you’re not a W-2 worker or have a gap in employment — don’t worry. If you have the stated income or assets to qualify, and a sound plan for the property, a hard money loan may work for you.
will educate you, grow with you, and support you as the real estate and capital markets shift, and you will be well on your way to a new world of real estate investing opportunities.
WHAT ARE THE TYPICAL TERMS OF A HARD MONEY LOAN?
Civic Financial Services, LLC is a leading institutional
The details to which the lender and the borrower agree upon constitute the “terms”. For a hard money loan, this includes interest rates, points, fees, loan duration, and LTV (Loan-to-Value). LTV is the outstanding debt on real property divided by the fair market property value. (For a property valued at $500,000 with a down payment of $100,000, the loan amount is $400,000, thus the LTV is 80%). When securing a hard money loan, you can expect to borrow 65-80% LTV. You must have some skin in the game. Rates, fees and points vary widely. Since hard money lenders take on more risk than a bank, interest rates are higher. But don’t make the rookie mistake and focus on interest rates. Keep your perspective on the
non-owner-occupied investment properties. CIVIC helps investors leverage opportunities to grow their real estate portfolios and build wealth through real estate. For more information, please visit www.civicfs.com.
Civicfs.com (844) 725-4488
©2022 CIVIC Financial Services, LLC. All Rights Reserved. This is not a may apply. CIVIC Financial Services, LLC reserves the right to amend rates and guidelines. NMLS ID 1099109. Loans made or arranged pursuant to a California Finance Lenders Law License 603L321. AZ Mortgage Broker License 0928633. OR Mortgage Lending License ML-5282. See www.civicfs.com/Licensing.
and the ability to proceed with your strategy likely outweigh a higher rate.
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